Secret World Bank Document Admits mistakes in Indonesia

By Pratap Chatterjee, IPS. 9 May, 1995

WASHINGTON, May 4 (IPS) - World Bank staff say that resettlement
plans made for the construction of a dam in Indonesia were
''highly defective'' and that 72 percent of the families affected
by the dam are now worse off than they were before the project
began.

The confidential ''project completion report'' for the Bank-funded
Kedung Ombo dam in central Java says 22 percent of the families
who moved to Sumatra after accepting a resettlement packageare now
better off. All but six percent of the remaining families who
accepted money to move themselves are now worse off.

The reservoir of the 61-metre-high Kedung Ombo dam, which was
completed in 1989 with a 166-million-dollar soft loan from the
Bank, covers an area of 6,700 hectares. It displaced 5,390
families -- or almost 30,000 people -- from 20 villages.

The report, which was obtained by IPS, cites studies conducted in
1993 by the Satya Wacana Christian University (SCMU) which showed
that 59 percent of the people who accepted government compensation
to find themselves new homes now earn less than their neighbours
who refused to move.

Families that moved to sites provided by the government actually
earned 25 percent less than their neighbours, according to the
SCMU study. The report says that the government is now giving
these families money to improve farming practices.

''The most basic flaw in the Kedung Ombo resettlement program was
the assumption that 90 percent of the people would join the
transmigration program (to Sumatra). As a result project planners
had no alternatives when more than 80 percent of the people decid
ed to remain,'' says the report.

''Sampling methodologies used in the baseline survey work were
highly defective. Most survey interviews appear to have consisted
of talks only with village leaders. As official appointees, one of
their functions was to promote transmigration,'' it adds.

Sources told IPS that senior Bank staff ignored this problem
despite the fact that a number of non-governmental groups, as well
as junior Bank officials, pointed out the problems. This is
confirmed in the report.

''Contemporary project records repeatedly report that the
situation was 'under control' during the 1987-88 period when all
other evidence demonstrates that this could not possibly have been
the case,'' says the report.

The Bank's Indonesia office issued a statement to IPS to confirm
that it felt the report was balanced. It added that the Bank was
prepared to implement recommendations included in the report.

''These include more candour, rigorous application of our policies
on resettlement, closer supervision, and early discussions with
government about the project's concepts to prevent problems from
remaining unrecognised or growing,'' says the statement.

When the sluice gates of the dam were shut in 1989 to fill the
reservoir, a number of villagers were stranded on the high ground
in the middle of the project.

''Dozens of people drowned in the following weeks as people tried
to adapt to a lifestyle in a lake with which they had no
experience. Many of them were farmers who did not know how to
swim,'' a student activist who lived in the area at the time told
IPS.

At the time the government offered farmers from villages, such as
Nglanji, which were completely submerged, 500 and 800 rupiahs (25
to 40 cents) per square metre of land, including crops.

Some Nglanji villagers sued the central Java administration and
the Ministry of Public Works, but their lawsuit was rejected by
both a local Semarang district court and an appeals court.

Four years later, the villagers won their battle before
Indonesia's Supreme Court which ordered compensation. Late last
year, the government appealed the decision and the compensation
order was revoked by the Court.

Despite the fact that the project completion report is very
critical of the Bank, Indonesian academics say it probably does
not go far enough. Arief Budiman, a sociologist at SCMU, says that
academics at his faculty are rarely able to get information about
projects unless they live in the immediate area.

''The Javanese, with their introvert culture, do not express their
feeling openly to strangers. They will not say what they wan t to
say to somebody with high educational background coming from big
cities who ask them questions that have something to do with
government policies,'' he wrote to the Bank earlier this year.

Adi Prasetjo, a local journalist, agrees. He wrote to the Bank to
complain that information supplied it by the Indonesian gover
nment was inaccurate.

''It is not true that the majority of the affected people had
taken the compensation and voluntarily moved out. Even, in
Kabupaten Sragen, which was considered the least problematic, the
affected people later criticised the government for having
pressured them, which action forced them to involuntarily leave,''
he wrote.

Recent research by Indonesian activists also suggests that the
families who moved to Sumatra may actually be worse off than those
who stayed behind.

''We have to say that the condition of the ex-Kedungombo
transmigrants is worse than the condition of those who stay in
Kedungo mbo areas,'' wrote Asmara Nababan, executive secretary of
the International Non-Governmental Organisation's forum on
Indonesian Development (INFID) in Jakarta, in a letter to the Bank
earlier this year.

''The land they received is still in the form of swamp which is
quite deep and difficult to drain. The location of the land is
also susceptible to flood. In addition, the land is also
infertile, making the agricultural production very poor,'' says
INFID.

''Making things worse, they have conflict of land rights with the
local people who claim that they hold ancestral rights over the
land,'' the letter adds.

The issue of resettlement is one that affects many Bank projects.
An internal review at the Bank last year showed that four mil lion
people are to be forced off their lands under Bank-backed projects
currently underway or likely to be approved by 1996. It points out
that one in seven dollars lent by the Bank goes to projects which
include forced resettlement.

According to the report, which was prepared by the Bank's
sociologist, Michael Cernea, there isn't a single project in the
world where resettled people were able to regain their past income
levels. Under the Bank's own directives, resettlement can only be
conducted if it results in maintaining or increasing the income of
the resettled people.